Racial differences in foreclosure crisis recovery, advocate says
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A report out today Tuesday from a homeowners advocacy group says communities of color are lagging far behind majority white neighborhoods in recovering from the foreclosure crisis.
The Minnesota Home Ownership Center says the foreclosure crisis is largely over. The 12,000 foreclosures in Minnesota last year is the same number as in 2006 -- the first year of the crisis.
In Southwest Minneapolis, median sales prices have risen above 2006 levels.
But Julie Gugin, the center's executive director, says a typical homeowner in north Minneapolis who bought in 2007 would need to see a 70 percent increase in value to return to the original purchase price.
"We do see that pattern of unequal recovery depending on neighborhood and quite frankly depending on race and ethnicity," she said. In north Minneapolis, 34 percent of homeowners owe more on their mortgages than their homes are worth. In the southwest corner of the city, the report says 8 percent of homeowners are underwater.
Those who were more affected by the foreclosure crisis and will take more attention to repair and recover, she said, adding that despite the recent crisis, the long term social and financial benefits of owning a home still remain.
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